TERRI N. WHITE, EXPERIAN INFORMATION SOLUTIONS, INC.,

Case 8:05-cv-01070-DOC-MLG Document 837 Filed 09/10/11 Page 1 of 36 Page ID #:13203

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UNITED STATES DISTRICT COURT

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FOR THE CENTRAL DISTRICT OF CALIFORNIA

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11 TERRI N. WHITE,

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Plaintiff(s),

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14 EXPERIAN INFORMATION SOLUTIONS, INC.,

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Defendant(s). 16

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) Case No. SACV 05-1070 DOC (MLGx) ) ) ) ) ORDER GRANTING FINAL ) APPROVAL OF CLASS ACTION ) SETTLEMENT FOR MONETARY ) RELIEF ) ) ) ) ) ) ) ) )

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Plaintiffs Jose Hernandez, Kathryn Pike, Robert Randall and Bertram Robinson

22 (collectively, "Settling Plaintiffs") along with Defendants Experian Information Solutions, Inc.

23 ("Experian"), Equifax Information Services, LLC ("Equifax") and Trans Union, LLC ("Trans

24 Union") (collectively, "Defendants") move this Court for an order granting final approval of the

25 monetary relief class action settlement ("Settlement") reached in the above-captioned case

26 ("Motion for Final Approval") (Docket 604). After considering all relevant written submissions

27 and oral argument, and for the reasons set forth below, the Court GRANTS the Motion for Final

28 Approval.

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Case 8:05-cv-01070-DOC-MLG Document 837 Filed 09/10/11 Page 2 of 36 Page ID #:13204

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I. BACKGROUND

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a. Factual History

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Plaintiffs filed this suit in 2005 as a result of allegations that Defendants had recklessly

4 and/or negligently violated -- and were continuing to recklessly and/or negligently violate -- the

5 Fair Credit Reporting Act ("FCRA"). Specifically, Plaintiffs accused Defendants of failing to

6 maintain reasonable procedures to ensure the accurate reporting of debts discharged in

7 bankruptcy and of refusing to adequately investigate consumer disputes regarding the status of

8 discharged accounts. Plaintiffs brought causes of action for (i) willful and/or negligent violation

9 of Section 1681e(b) of the FCRA and its California counterpart, Cal. Civ. Code Section

10 1785.14(b), (ii) willful and/or negligent violation of Section 1681 i of the FCRA and its

11 California counterpart, Cal. Civ. Code Section 1785.16, and (iii) violation of Cal. Bus. & Prof.

12 Code Section 17200 et seq.

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After briefing and hearings on motions for class certification and for summary judgment,

14 class counsel1 began to mediate their claims with Defendants on August 15, 2007. The parties

15 negotiations included seven in-person sessions with a JAMS mediator, the Hon. Lourdes Baird

16 (Ret.), five in-person sessions with mediator Randall Wulff, and various other in-person and

17 telephonic meetings involving counsel for the parties. These sessions ultimately yielded two

18 settlements: one for injunctive relief and the instant Settlement for damages. Several objectors

19 emerged in response to the monetary relief Settlement, the most prominent being plaintiffs Maria

20 Falcon, Chester Carter, Arnold Lovell, Jr., Clifton C. Seale, III, and Robert Radcliffe

21 (collectively, "White Plaintiffs").

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The Court approved the injunctive relief settlement in an order dated August 19, 2008.

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1 Class counsel includes: Lieff, Cabraser, Heimann & Bernstein, LLP, and its

25 attorneys Michael W. Sobol and Allison S. Elgart; Caddell & Chapman and its attorneys

Michael A. Caddell, Cynthia B. Chapman, and George Y. Nino; National Consumer Law 26 Center and its attorneys Stuart T. Rossman and Charles M. Delbaum; Consumer

27 Litigation Associates, P.C. and its attorneys Leonard A. Bennett and Matthew Erausquin; Well, Green, Toups & Terrell, LLP and its attorney Mitchell A. Toups; and Callahan

28 McCune & Willis and its attorney Lee A. Sherman.

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Case 8:05-cv-01070-DOC-MLG Document 837 Filed 09/10/11 Page 3 of 36 Page ID #:13205

1 Approval Order Regarding Settlement Agreement and Release, Aug. 19, 2008 (Docket 338).

2 The Court now approves the instant Settlement for damages.

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b. Key Terms of the Settlement

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Before discussing the adequacy of the Settlement, a brief review of its terms is in order.

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i: Class Definition

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The Rule 23(b)(3) Settlement class includes all consumers who have received an order of

7 discharge pursuant to Chapter 7 of the United States Bankruptcy Code and who, at any time

8 between and including March 15, 2002 and the present (or, for California residents in the case of

9 Trans Union, any time between and including May 12, 2001 and the present), have been the

10 subject of a Post-bankruptcy Credit Report issued by a Defendant in which one or more of the

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a. A Pre-bankruptcy Civil Judgment that was reported as

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outstanding (i.e. it was not reported as vacated, satisfied, paid,

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settled or discharged in bankruptcy) and without information

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sufficient to establish that it was, in fact, excluded from the

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bankruptcy discharge;

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b. A Pre-bankruptcy Installment or Mortgage loan that was

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reported as delinquent or with a derogatory notation (other

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than "discharged in bankruptcy," "included in bankruptcy," or

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similar description) and without information sufficient to

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establish that it was, in fact, excluded from the bankruptcy

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discharge; and/or

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c. A Pre-bankruptcy Revolving Account that was reported as

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delinquent or with a derogatory notation (other than

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"discharged in bankruptcy," "included in bankruptcy" or

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similar description) and without information sufficient to

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establish that it was, in fact, excluded from the bankruptcy

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discharge; and/or

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Case 8:05-cv-01070-DOC-MLG Document 837 Filed 09/10/11 Page 4 of 36 Page ID #:13206

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d. A Pre-bankruptcy Collection Account that remained in

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collection after the bankruptcy date.

3 Settlement Agreement ? 1.48.2

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ii: Settlement Terms

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The total settlement fund in this case equals $45 million, comprised of $15 million

6 contributed by each of the three Defendants. There is no possibility that any of the $45 million

7 fund will revert back to any Defendant. Rather, after the costs of settlement administration,

8 notice and claims administration are deducted, the parties will distribute each remaining dollar of

9 the $45 million fund to class members according to the distribution plan described below.

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A. Convenience Awards

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To qualify for a Convenience Award, a claimant need only to sign a statement attesting to

12 her belief that she qualifies as a class member. The Settlement Agreement mandated that the

13 amount of money available for Convenience Awards be no less than $10 million. After

14 deductions for attorney's fees and costs, incentive awards, actual damage awards and

15 administrative expenses, it is estimated that $20,213,088 will remain for distribution to

16 convenience award claimants.

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Approximately 754,783 class members made such an attestation and submitted a claim

18 for a Convenience Award. May 2, 2011 Keough Decl., ? 4. Each Convenience Award claimant

19 stands to recover approximately $26.78 as a result of the Settlement. Id.

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B. Actual Damages Awards

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Actual Damages Awards are reserved for class members who can demonstrate, by

22 compliance with the documentation requirement described below, that they experienced actual

23 harm as a result of Defendants' improper credit reporting. The type of harm sufficient to qualify

24 a class member for an Actual Damages Award includes a denial of employment ("Employment

25 award"), a denial of a mortgage or housing rental ("Mortgage or Housing Rental award"), and a

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2 All capitalized terms are defined in the manner set forth in the Settlement

28 Agreement crafted by Settling Plaintiffs and Defendants.

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Case 8:05-cv-01070-DOC-MLG Document 837 Filed 09/10/11 Page 5 of 36 Page ID #:13207

1 denial of credit or auto loan ("Credit, Auto or Other Credit award"). Class members denied

2 employment stand to recover the largest Actual Damages Award under the Settlement, whereas

3 class members denied credit or auto loans will receive payments at the lowest end of the actual

4 damages spectrum.

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Approximately 15,000 Actual Damages Awards claimants exist currently. Of this group,

6 2,141 claimants were denied employment and are therefore eligible for a minimum award of

7 $750; 5,593 claimants were denied a mortgage or housing rental and are therefore eligible for a

8 $500 minimum award; and 7,600 claimants were denied credit or auto loans and are therefore

9 eligible for a minimum award of $150. Decl. of J. Keough Re Final Report of Supp. Claims, ? 8,

10 May 2, 2011 ("May 2, 2011 Keough Decl.") (Docket 751). The Actual Damage Awards will be

11 paid after the Convenience Award claimants are sent their awards. Ninety days after the

12 Convenience Awards are sent, any funds remaining from the Convenience Awards (due to

13 returned or not negotiated checks) will be added to the amount distributed to Actual Damage

14 Award claimants.

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c. Procedural History

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Having discussed the relevant terms of the Settlement, the Court turns to the procedural

17 history that surrounds it. On May 7, 2009, the Court granted preliminary approval of the

18 Settlement and provisionally certified the settlement class under Fed. R. Civ. P. 23(b)(3). Order

19 Granting Preliminary Approval to Proposed Class Action Settlement . . ., May 7, 2009

20 ("Preliminary Approval Order") (Docket 423). Pursuant to the Preliminary Approval Order,

21 notice and claim forms were disseminated to approximately 15 million people who, according to

22 Defendants' records, likely qualified as putative class members. The initial notice allowed

23 claimants to select between a Convenience Award and an Actual Damage Award simply by

24 making certain attestations. Specifically, to qualify for an Actual Damages Award under the

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